The last quarter of 2018 is almost coming to an end. Bitcoin price alongside other cryptocurrencies in the market are trending south as opposed to the expected recovery and bull rally. The market performed extremely well towards the end of last year. However, 2018 has been a year of trimming gains with bears being in control most of the time. The market has lost more than $800 billion in capitalization to the current $183 billion. Although the market value has been in a downward trend, the industry has achieved far more in terms of development in 2018. The infrastructure is better while digital assets are accessible almost everywhere around the world.
Why the overwhelming drop in 2018?
The virtual currency market has been in a tailspin for most of 2018. The declines resumed last with where Bitcoin explored new yearly lows while the market tanked below $200 billion to the current $183 billion. Putting this trend into the perspective of the market is essential for investors. It is vital to realize that, Bitcoin price has in the last couple of years surged from trading at $800. Moreover, the parabolic move last year also means that a reversal is normal. Crashes in markets are not new, surges too.
A broader look at Bitcoin price performance starting November 2013 to January 14 2015, we can see that BTC/USD dropped from $1,163 to a mere $152 representing an 87% decline. This means that, Bitcoin value and the entire market has a chance to reverse the trend, many experts in the market do believe so too.
Looking back at the beginning of the year, various industry leaders released their predictions of Bitcoin value in the next 12 months, 2 years and 5 years. For instance, Tom Lee, the founder of Fundstrat place Bitcoin at $25,000 by the end of 2018. He later revised this figure to $20,000 saying that it a more achievable figure. Likewise, Nigel Green, founder of deVere Group recently shared his opinion on the future of the cryptocurrency market. Green said that he expects the market to grow more than 5,000% in the next 10 years noting that digital assets are not going anywhere, they are here to stay.
How will this trend reverse?
Recently, eToro’s lead analyst Matt Greenspan said that it is hard to tell when this downward trend will stop. Bitcoin price must find a bottom for it to revamp the trend to the upside. However, no one can say for sure when this will happen. What I can say is the support that the market and the digital assets are getting from new players (institutional investors) is indeed a good cue that we can start to see a positive change in price sooner or later.
The Intercontinental Exchange (ICE), for instance, is working on a crypto project referred to as Bakkt. This product is expected to go live sometime in December 2018. Moreover, Fidelity, a financial service provider that prides itself in managing at least $7.2 trillion in assets has expressed interest in the digital market. Other market movers could be the approval of a cryptocurrency exchange-traded fund (could happen in 2019). Other top market players like BackRock are planning for cryptocurrency services. Goldman Sachs and JP Morgan have also told their customers that soon they will be having crypto services as well.